What Are Nielsen Ratings And How Are They Calculated?

Seamus Kirst
, ContributorI write about TV, from ratings to cultural representations.Opinions expressed by Forbes Contributors are their own.

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To proprietarily calculate local TV ratings, the company uses a much less glamorous system. During their yearly 'sweeps' – specific time periods during February, May, July and November – Nielsen distributes and collects two million paper diaries from local viewers in the smallest markets (outside the top 56 advertising markets) across the country. Essentially, viewers track and record when and what they watch, write it down and send it back to Nielsen.

As times and technology have changed, the company has had to adapt, as well. With the rise of DVRs, OnDemand channels and instant watch mobile apps, people in the United States can watch shows whenever they want. Furthermore, the TV is far from the only means of television viewing: Americans frequently watch programs on computers, tablets and mobile devices.

Nielsen now keeps track of all viewing enabled for measurement across all platforms, including computers, tablets and smartphone devices, happening up to seven days after an original broadcast when calculating ratings.

Though streaming systems like
Netflix have complicated the ratings system by refusing to make public their viewership data, Nielsen is still able to tracks the ratings for syndicated shows that are shown on these subscription-based on demand services. To do this, a client must opt in and send Nielsen audio files for a specific program. The files are then put in an audio repository, and the panel technology works similarly to Shazam. Whenever the audio from a show streaming on Netflix or Hulu matches a file in the repository, the panel measures this data.

Nielsen is still able to measure video content watched on mobile devices that they otherwise would have been able to measure on a TV, ie.) Bravo OnDemand. To do this, they have expanded their panels to include census style-data.

"Nielsen has been working with clients and partners to better measure online and mobile viewers, like asking TV networks to install software in their digital video players, websites, and apps to track their digital audiences, and striking data deals with partners like
Facebook to anonymously collect the demographics of the more than 180 million American Facebook users who watch those digital videos or use those websites and apps,” said Kelly Abcarian, senior VP for global watch product leadership at Nielsen.

The ultimate question: Are ratings becoming irrelevant?

Doubt it.

As Nielsen continues to utilize “time-shifted” viewing and third party tracking of mobile watching while television ad revenues are only projected to increase, the company and its ratings don’t look like they’re going to be obsolete anytime soon.